More than one Y Axis, for correlation study

[Djobydjoba]

Just for the record, another article about divergence/convergence strategies using correlation:
https://forexop.com/strategy/intermarket-analysis/

This is another illustration of the widespread use and usefulness of this correlation graph type with a dual Y-Axis and the bottom part that shows the variation of the correlation over time.

Would be great if this graph type could be added in a future update of FM!

[Mark]

Hi Djobydjoba,

Thanks for the article and feature feedback.

[Djobydjoba]

Hi Mark,

I'm still very interested in a better way to compare graphically the correlation between 2 (or more) investments. I've added in Fund Manager a lot a special investments that are economic indicators, or calculated investments, to help analyze markets and forecast future trends, and I need an more efficient way to study the correlation between these indicators and standard investments like stock indexes.

In this context and as discussed before, the Investment Overlay graph type, with its current "performance mode" (comparison of the evolution in %) is not suitable.

An example: it is given that there is a quite significant correlation between the EUR/USD exchange rate and the spread 2 Year Germany bond yield minus 2 Year U.S. bond yield. But this correlation can't be analyzed properly with the Investment Overlay graph type because here is the result:

https://i.ibb.co/YDWTzkj/20231112-dim-12h20-01.png

Another example, if you want to study the correlation between a stock index and an exchange rate, it's often impossible:

https://i.ibb.co/B49mnXY/20231112-dim-12h22-01.png


So currently I think the only way is to display two graph windows one above the other but is is not very handy nor optimal when you have to do this regularly.

https://i.ibb.co/fCnwVc6/20231112-dim-12h13-01.png

Probably my initial 2 Y-Axis request would be too complicated to implement and to use in the program.

But what you had suggested above would be I think a very good solution, a very useful feature and that would be great if it could be added:

Another option would be to add a mode to the Investment Overlay graph such that all plotted lines were not on the same % scale. Each line would still be normalized to 100% at the beginning of the graph date range, but the scale could be set independent for each investment such that each investment reaches the max/min Y axis. There would basically be no Y axis labels, as they would each be at a different scale, but could be useful for a "correlation" mode, as opposed to a "performance comparison" mode which is currently how these operate.

Having the correlation coefficients displayed on the graph, for the date range selected, could be great too. Could be the correlation coefficients for the non scrollable investments, calculated with reference to the investment on the "scrolling position" (i.e.. which has its label on the left side of the legend).

Thanks.

[Mark]

Hi Djobydjoba,

Okay, understood, sorry we haven't been able to implement this yet. It is still on the list to consider...

[Djobydjoba]

Mark,

I come back to this request. I still need to compare easily the correlation of two or more investments (peaks and valleys), each with its own full Y-scale amplitude.

Some ideas/suggestions made before in this discussion were:

1) Add the possibility to open a second investment in the same graph area, with a second Y-Axis.
> This seems really too complicated to implement.

2) Add a mode to the Investment Overlay graph such that all plotted lines were not on the same % scale (see the quote in the previous post for the entire description)
> Could be really interesting indeed.

In the beginning of this discussion, you also wrote:

As a work-around, one option you have now is to create 2 graph windows. You can tile the two windows, so they are above/below. Graph one investment in 1 window, and the other in the other window.

This work-around with several graph windows is really not handy on a daily basis, when comparing graphs is part of your daily routine. But the idea is probably here...

I realize my needs would be fulfilled with the requests made in this post. In particular:
- A 2-display for graphs, with one graph on top of the other.
- An option to change the display order: top to bottom first, and then left to right.

With the option to change the display order, I could sort (manually or not) the investments I want to compare, to display them in the vertically order I want. And I could scroll vertically to change the selection to compare.

With several display choices, I could choose to display vertically, 2 or 3 investments to compare. If the new displays I suggested could be added, there could be also 1, 2, or 3 columns (of 2 or 3 investments each, vertically displayed) that I could compare. And I could easily change the investment order to change a group of investments to compare.
That would be a very efficient setup for comparing investments and their correlation!

So with these improvements I could compare easily the investments with each other (correlation, peaks and valleys), in a very satisfactory manner.

Thanks much for considering.

[Mark]

Hi Djobydjoba,

Okay, understood. Thanks for the ideas/feedback.